Obesity-related health disparities represent one of the most significant public health challenges facing our society. In particular, obese Latino adolescents are disproportionately impacted by insulin resistance, psychosocial consequences, and type 2 diabetes but few prevention interventions have been conducted in this vulnerable and underserved group. Therefore, we propose a randomized-controlled trial to test the efficacy of a culturally-grounded, community-based diabetes prevention program to increase insulin sensitivity and weight-specific quality of life in 160 obese Latino adolescents. We will also explore potential mediators and moderators of the intervention's effects and estimate the initial incremental cost-effectiveness of the intervention for increasing insulin sensitivity. The intervention is guided by Social Cognitive Theory and framed within a multilevel ecodevelopmental model to address surrounding contextual factors that are thought to influence health behaviors and health outcomes in obese Latino youth during a critical life period. The project builds upon extant collaborations of a transdisciplinary team of investigators with the community to address critical gaps in how prevention interventions for obese Latino youth are developed, implemented and evaluated. This innovative approach is an essential step in the development of cost-effective, solution oriented programs to improve the health of Latino youth.